TIDMMMAT
RNS Number : 1635R
Marwyn Materials Limited
17 August 2010
17 August 2010
MARWYN MATERIALS LIMITED
Reverse Acquisition of Breedon Holdings Limited
Placing of GBP50 million
Posting of Admission Document and Notice of Extraordinary General Meeting
Summary of the proposed Acquisition and Placing
* The Board of Marwyn Materials Limited ("Marwyn Materials" or the "Company")
today announces that Marwyn Materials Investments Limited, a subsidiary of the
Company has entered into conditional agreements to acquire the entire issued
share capital of Breedon Holdings Limited ("Breedon"), a large independent UK
aggregates producer, for a total consideration of GBP2.25 million in cash and
warrants to subscribe for 55,266,667 Ordinary Shares at an exercise price of
12.0 pence per share (representing 10.0 per cent. of the Enlarged Share Capital
of the Company).
* In view of the size of Breedon, the Acquisition will constitute a reverse
takeover pursuant to Rule 14 of the AIM Rules for Companies and as such will
require the approval of Shareholders, which will be sought at an Extraordinary
General Meeting convened for 10.00 a.m. on 1 September 2010 at the offices of
Travers Smith LLP, 10 Snow Hill, London EC1A 2AL. The Admission Document has
been published and is expected to be sent to Shareholders today.
* The Company also announces that it has conditionally raised GBP50.0 million
(before expenses) by the issue of 416,666,667 Placing Shares at 12.0 pence per
share (the "Placing Price"). The net proceeds of approximately GBP44.25 million
will be used to pay down some of the Breedon Group's debt and provide
approximately GBP25.0 million to fund the ongoing working capital of the
Enlarged Group and to finance potential future acquisitions.
* Marwyn Materials was admitted to AIM on 12 June 2008 as a special purpose
vehicle with initial funding of GBP13.6 million (before expenses). The stated
strategy of the Company was to acquire controlling stakes in one or more quoted
or unquoted profitable businesses or companies in the UK and international
building materials industry by way of a reverse takeover and to use these as a
platform for further acquisitions, creating shareholder value through market
consolidation. The Directors have reviewed a number of potential acquisition
targets since the Company was admitted to AIM and believe that the acquisition
of Breedon represents an exciting opportunity within this strategy.
* Following Admission, the Company will be renamed Breedon Aggregates Limited.
Highlights
* Immediate scale - Breedon is the largest independent player in the UK
aggregates sector after the five global majors with 29 quarries, 19 asphalt
plants and 27 concrete plants in England and Scotland
* Strong asset backing with approximately 181 million tonnes of mineral reserves
and resources in the UK, providing an estimated life of approximately 50 years
at current output levels
* Investment being made at a low point in the economic cycle
* Business generates positive operating cashflow, but the Directors believe it
needs strategic direction and improved leadership
* The Directors have over 70 years of experience in the building materials
industry
* The Directors believe that Breedon will provide the Company with a robust
platform for accelerated growth through consolidation of the UK heavyside
building materials sector
Commenting on the Acquisition and Placing Peter Tom CBE, Chairman of Marwyn
Materials, said:
"Breedon represents a unique opportunity for us to acquire a profitable and
well-invested building materials company at or near the bottom of the cycle. We
are confident that we can appreciably improve the financial and operational
performance of the business over the next few years, drawing on the experience
and commitment of a board and senior management team with outstanding experience
in our industry.
"Opportunities to secure such a substantial position in the UK building
materials market come along very rarely. As the UK's largest independent
building materials business, Breedon provides us with an excellent launchpad
from which to make further acquisitions and consolidate the smaller end of the
UK market, and we already have several acquisitions in our sights or under
negotiation.
"We intend to be a nimble, flexible player with a strong commitment to customer
service, which we believe will enable us to increase revenues and optimise
margins in the business."
Enquiries:
Marwyn Materials
Peter Tom / Simon Vivian
+44 (0)20 7389 6800
Cenkos Securities plc (nominated adviser and broker)
Beth McKiernan / Max Hartley
+44 (0)20 7397 8900
Marwyn Materials
Steve Jacobs (head of communications)
+44 (0)78 3176 4592
Shareholders are informed that the Admission Document has been published and is
expected to be posted today, together with a notice convening the Extraordinary
General Meeting at which the approval of Shareholders will be sought, inter
alia, for the Acquisition, the authority to allot new Ordinary Shares pursuant
to the Placing and to change the name of the company to Breedon Aggregates
Limited. A copy of the Admission Document is available from the Company's
website: www.marwynmaterials.com
Background to the Acquisition
The UK Building Materials Market
In 1990 there were nine fully-listed big-name UK aggregates companies, including
Blue Circle, Tarmac, Hanson, RMC and Aggregate Industries, but following
significant market consolidation during the last 20 years, there are now none.
The UK building materials market is dominated by the four major global cement
companies: Holcim, Heidelberg, Cemex and Lafarge, together with Tarmac. Many of
these global players have significant debt burdens and hence are currently less
focused on pursuing acquisitions. The smaller end of the aggregates market is
still highly fragmented with over 200 businesses currently operating in the UK,
some of which are available for acquisition, providing an opportunity for a
smaller, more focused independent supplier to increase market share by
acquisition and by providing a first-class localised service to customers.
In 2009 the UK construction industry declined by 12 per cent., its sharpest
annual decline in output since 1974. Consequently aggregates volumes declined
by approximately 24 per cent., reflecting the greater severity of the recession
in the heavy building materials sector. Based on their extensive experience
during previous recessions, the Directors believe that investing at the current
cyclical low point presents an opportunity to create significant value.
History of the business of Breedon
Breedon's trading history dates back to 1996 as the former Ennstone plc. By
2007, Ennstone had become, through a series of bolt-on acquisitions, the largest
independent UK aggregates producer after the four major global cement companies
and Tarmac. Ennstone's operations included the production of aggregates,
asphalt, ready mix concrete, other concrete products and contracting services in
the UK, the production of aggregates and ready mix concrete in the US, and the
production of aggregates and ready mix concrete production in Poland.
Up until 2007, Ennstone delivered consistently strong historical returns.
However, the recent general
economic downturn had a harsh impact on the construction industry in each of
Ennstone's geographical markets and as a consequence the performance of Ennstone
deteriorated. In addition, Ennstone had become highly leveraged, principally
due to a number of debt-funded acquisitions and a high level of investment in
new equipment funded through finance leases. The deterioration of the UK and US
building materials markets resulted in Ennstone being unable to generate
sufficient cash flows to meet covenant requirements and debt repayments,
particularly at the level of its US subsidiary. Furthermore, certain
subsidiaries of Ennstone participated in a defined benefit pension scheme which
was in deficit. On 24 February 2009, Ennstone Inc. (Ennstone's US subsidiary)
filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy
Code, triggering a parent company guarantee in the UK. Ennstone and certain of
its UK subsidiaries consequently went into administration on 9 March 2009.
Breedon was incorporated on 15 December 2008 in advance of a pre-packed
administration and on behalf of the BHL Lenders acquired certain assets and
trading subsidiaries of Ennstone (comprising Johnston (England), Thistle
(Scotland) and Enneurope (Poland)) on the date of administration of Ennstone.
At the same time, Breedon entered into a new GBP140 million bank facility with
the BHL Lenders and responsibility for the pension deficit (and for the debt
which will be triggered when the Johnston Management Holdings Limited Pension
and Life Assurance Scheme winds up) was transferred to a subsidiary of Ennstone
which was placed into administration. Accordingly Breedon does not retain any
liability for the defined benefit pension scheme. The Pensions Regulator
approved the transfer and granted clearance for this administration. As part of
the agreement reached with the Pensions Regulator, the Trustee Shares were
transferred to the Trustees so that at the date of the Admission Document, 67
per cent. of the issued share capital of Breedon is owned by the Vendors with
the remaining 33 per cent. share owned by the Trustees.
On 16 August 2010, Breedon transferred the entire issued share capital of
Enneurope, the parent company of Ennstone Sp. z o.o. to Enneurope Holdings
(incorporated on behalf of the BHL Lenders and wholly-owned by the Vendors) in
consideration for assuming GBP5.5 million of the debt drawn down on the existing
facilities agreement. It is expected that Enneurope Holdings will sell
Enneurope or Ennstone Sp. z o.o. to a third party but, if it does not, it has a
right to put it back to Breedon for a consideration of GBP5.5 million pursuant
to an agreed Put and Call Option. If the Put and Call Option is exercised, the
acquisition of Enneurope will be subject to certain conditions, including the
consent of the Office of Competition and Consumer Protection in Poland and the
continued solvency of Enneurope and its subsidiaries and would include only
limited warranties as to title and capacity. The acquisition would be funded by
a drawdown under the New Facilities Agreement, which would increase the total
facilities under that agreement by GBP5.5 million.
Enneurope owns the entire issued share capital in Ennstone Sp. z o.o. which
operates three quarries and nine concrete plants located in the north west of
Poland. It supplies sand and gravel as well as ready mix concrete and concrete
pumping products to this region. It generated profits of GBP1.4 million in the
financial year ended 31 December 2008 from revenue of GBP18.4 million, with the
highest proportion of revenue being generated by the ready mix concrete
business.
Principal operations
The principal activities of Breedon comprise: quarrying and sale of aggregates;
production and sale of asphalt; production and sale of ready mix concrete; and
contracting (asphalt surfacing). The Group currently employs approximately 700
employees in two autonomous trading divisions, each with its own management and
finance functions.
Johnston
Johnston is based in the Midlands, and comprises ten quarries (six crushed rock,
one sand and gravel, plus three that are currently non-operational), eight
asphalt plants (including one that is currently non-operational) and five
concrete plants.
It employs approximately 300 people and produces aggregates, ready mix concrete
and a range of asphalt products for supply throughout the East Midlands, West
Midlands and East Anglia. Its road surfacing business operates in an area from
the East Coast to Mid Wales and from the M62 corridor to the South Midlands.
The production of asphalt for road surfacing materials is the largest activity
in Johnston by revenue, and is used on trunk roads, driveways and car parks for
both new construction and maintenance. The primary aggregates business produces
a full range of construction aggregates including decorative aggregates, which
are used extensively in many of Britain's stately homes and visitor attractions.
A significant proportion of aggregates production is used internally to
manufacture asphalt and ready mix concrete. The contracting services business
supplies contractors undertaking activities including minor road surfacing
contracts as well as major infrastructure contracts and is an important route to
market for asphalt. The ready mix concrete business has applications across
residential, industrial, commercial and infrastructure sectors for small and
large contracts as well as the DIY market.
Thistle
Thistle is based in Northern Scotland and comprises 19 quarries (16 crushed rock
and three sand and gravel), 11 asphalt plants and 22 concrete plants.
Thistle has almost 400 employees in a number of locations across Scotland
including Dundee, its head office. The division offers a fully integrated
service to customers through its supply of aggregates, ready mix concrete,
asphalt and contracting services.
Thistle's asphalt and contracting businesses generate the highest revenue of the
division and, like Johnston, Thistle services a broad range of activities from
small driveways and road surfacing contracts through to large motorway
contracts. Through its wholly owned subsidiary, Ennstone Facilities Management
Limited, Thistle owns a 37.5 per cent. stake in BEAR (along with its joint
venture partners Jacobs UK Limited and Ringway Group Limited). Through this
strategic alliance with BEAR, Thistle also generates income from BEAR's
management and maintenance of both the North East and South East trunk road
networks on behalf of Transport Scotland and from traffic management services
through its 90 per cent. owned subsidiary Alba Traffic Management Limited.
Mineral Reserves and Resources
Breedon has current reserves totalling 181.2 million tones, of which
approximately 53 per cent are fully consented. At current output levels, the
estimated life of Breedon's consented and unconsented aggregates reserves is
approximately 50 years.
Summary financial information and current trading of Breedon
Since mid-2008 the UK construction industry has seen a significant decline in
output, recording a 12 per
cent. fall in 2009 alone, the sharpest annual fall in 35 years. Building
material volumes also fell, with primary aggregates volumes down 24 per cent.,
asphalt volumes down 18 per cent. and concrete volumes down 28 per cent.
The following financial information has been extracted from the audited company
accounts of Johnston and Thistle prepared in accordance with UK GAAP for the
three years ended 31 December 2009, 2008 and 2007. It excludes head office and
other consolidation adjustments.
+-----------------------+-------------+--------------+------------+
| Johnston: | 12 month period ending 31 December |
+-----------------------+-----------------------------------------+
| | 2009 | 2008 | 2007 |
+-----------------------+-------------+--------------+------------+
| | GBP'000 | GBP'000 | GBP'000 |
+-----------------------+-------------+--------------+------------+
| Revenue | 57,738 | 86,216 | 77,639 |
+-----------------------+-------------+--------------+------------+
| EBITDA1 | 5,554 | 5,320 | 14,359 |
+-----------------------+-------------+--------------+------------+
+-----------------------+-------------+--------------+------------+
| Thistle: | 12 month period ending 31 December |
+-----------------------+-----------------------------------------+
| | 2009 | 2008 | 2007 |
+-----------------------+-------------+--------------+------------+
| | GBP'000 | GBP'000 | GBP'000 |
+-----------------------+-------------+--------------+------------+
| Revenue | 76,269 | 97,557 | 83,839 |
+-----------------------+-------------+--------------+------------+
| EBITDA1 | 13,926 | 17,957 | 15,006 |
+-----------------------+-------------+--------------+------------+
1. EBITDA represents profit before finance income, finance costs, income
tax expense, depreciation, amortisation and impairments and is further adjusted
to add back exceptional items and excludes income from associates and Alba
Traffic Management Limited.
The audited consolidated results for the Breedon Group prepared in accordance
with IFRS for the 13 month period ended 31 December 2009 (which includes trading
from 9 March 2009 and a gain on bargain purchase of GBP30m) show profit before
taxation of GBP20.7 million.
After a challenging start to the year, turnover during the second quarter of
2010 has been stronger, driven by increased volumes and slightly improved
pricing. Price increases, particularly in relation to increased bitumen costs,
are gradually being passed on to customers, leading to improving EBITDA margins.
Net assets declined by GBP5 million during the six-month period from 31
December 2009, due to a loss before tax which was mainly attributable to the
significant payment-in-kind interest accrual. This interest burden is expected
to decline significantly after the Acquisition with the GBP50 million reduction
in the level of drawn debt facilities and reduced interest margins on the New
Bank Facilities.
The trading information above should be read in conjunction with the full text
of the Admission Document.
Further opportunities
The Directors and Executives of Marwyn Materials believe that they can provide
Breedon with strategic direction, re-energise the existing management team and
drive earnings improvement in the Breedon Group, particularly by improving
commercial performance and boosting operational efficiency. The Directors have
identified the following opportunities to increase revenue:
Managerial
The Directors believe that Breedon is a strong business but needs strategic
direction and improved leadership. There is scope to re-energise the existing
management team, which has been operating without a Group Chief Executive
Officer since September 2009. The operational and commercial performance of the
business has suffered over the last few years and will need to be strengthened.
Financial & Acquisitions
The Directors intend to seek to improve the financial performance of the
businesses organically through improved financial controls and working capital
management. Acquisitive growth, which will be funded partly through the New
Bank Facilities, is also expected to improve the financial performance of
Breedon.
The Directors have already identified a number of opportunities which are
currently under negotiation. These opportunities are all aggregates-related and
will complement Breedon's existing activities.
Operational
Drawing on their extensive operating management experience, the Directors have
identified a number of operational issues which they intend to address upon the
Acquisition, including:
- Improving procurement, particularly for bitumen and cement - the
main raw materials in the production of asphalt and ready mix concrete;
- Increasing productivity at quarrying operations through better cost
control;
- Elimination of losses in Johnston's contracting operations;
- Optimisation of haulage performance through better logistics
management and increased use of owner drivers;
- Differentiating customer service and forging closer relationships
with key customers to drive margin improvement and capture additional
market share;
- Building relationships with all stakeholders to facilitate mineral
reserves replacement; and
- Securing necessary quality and environmental accreditation to ensure
that sales opportunities are not missed.
Following the implementation of the organic and acquisition growth strategy, and
subject to prevailing market and trading conditions at the time, the Directors
intend to make an application to the UK Listing Authority for the Ordinary
Shares to be admitted to a standard listing on the Official List and to the
London Stock Exchange for the Ordinary Shares to be admitted to trading on the
Main Market.
Directors
There are no new directors joining the Board at Admission. However, the
Directors intend to appoint another non-executive director, who will be
independent of both Marwyn and the Directors, to the Board of the Company within
three months of Completion.
Peter Tom has subscribed for 8,333,333 Ordinary Shares as part of the Placing
and Simon Vivian has been issued 666,667 Ordinary Shares pursuant to the bonus
arrangements set out in paragraph 8.1.4 of Part VII (Additional Information) of
the Admission Document so that the Directors' shareholdings, immediately
following Admission, will be as follows:
+------------------------+------------------------+------------------------+
| Director | Number of Ordinary | Percentage of Enlarged |
| | Shares held | Share Capital |
| | immediately following | |
| | Admission | |
+------------------------+------------------------+------------------------+
| Peter Tom CBE (and | 30,683,333 | 5.5 |
| family) | | |
+------------------------+------------------------+------------------------+
| David Williams | 11,000,000 | 1.9 |
+------------------------+------------------------+------------------------+
| James Corsellis (and | 5,500,000 | 1.0 |
| family) | | |
+------------------------+------------------------+------------------------+
| Simon Vivian | 3,166,667 | 0.6 |
+------------------------+------------------------+------------------------+
| David Warr | 2,500,000 | 0.5 |
+------------------------+------------------------+------------------------+
Principal terms and conditions of the Acquisition
On 16 August 2010 Marwyn Materials and Marwyn Materials Investments entered into
the Main SPA with the Vendors in respect of their 67 per cent. shareholding in
Breedon and the Trustee SPA with the Pension Trustees in respect of their 33 per
cent. shareholding, pursuant to both of which Marwyn Materials Investments will
acquire the entire issued share capital of Breedon.
The consideration payable by Marwyn Materials Investments under the Main SPA is
GBP1, to be satisfied in cash on Completion. Separately, the BHL Lenders will
be issued warrants to subscribe for 55,266,667 Ordinary Shares (representing
10.0 per cent. of the Enlarged Share Capital) with an exercise price of 12.0
pence per share and an exercise period of seven years in consideration for the
entry into the New Bank Facilities. The consideration payable by Marwyn
Materials Investments under the Trustee SPA is GBP2.25 million, to be satisfied
in cash on Completion. Limited warranties as to capacity and title are being
provided by the Vendors and the Trustees under the Acquisition Agreements.
On 16 August 2010, Breedon transferred the entire issued share capital of
Enneurope, the parent company of Ennstone Sp. z o.o. to Enneurope Holdings
(incorporated on behalf of the BHL Lenders and wholly-owned by the Vendors) in
consideration for assuming GBP5.5 million of the debt drawn down on the existing
facilities agreement. It is expected that Enneurope Holdings will sell
Enneurope or Ennstone Sp. z o.o. to a third party but, if it does not, it has a
right to put it back to Breedon for a consideration of GBP5.5 million pursuant
to the Put and Call Option. If the Put and Call Option is exercised, the
acquisition of Enneurope will be subject to certain conditions, including the
consent of the President of the Office of Competition and Consumer Protection in
Poland and the continued solvency of Enneurope and its subsidiaries and would
include only limited warranties as to title and capacity.
Completion of the Acquisition Agreements is conditional, amongst other things,
upon:
- The Placing Agreement becoming unconditional (save with respect to
Admission);
- The New Bank Facilities becoming unconditional (save with respect to
Admission);
- Shareholder approval of the Acquisition at the Extraordinary General
Meeting; and
- Admission.
In connection with the Acquisition, the Managers have given certain warranties
to Marwyn Materials Investments. Additional information relating to the
Management Warranty Deed and Acquisition Agreements is set out in Part VII
(Additional Information) of the Admission Document.
Principal terms and conditions of the New Facilities Agreement
On 16 August 2010, the Company and Breedon entered into an amendment and
restatement agreement with (amongst others) the BHL Lenders, pursuant to which
Breedon's existing facilities agreement will be amended and restated from
Completion. The New Bank Facilities, which will be made available on the terms
of the New Facilities Agreement, will comprise:
a) a GBP64.5 million term facility, to be made available to Breedon;
b) a GBP15.0 million revolving facility A, to be made available to fund
the Enlarged Group's working
capital requirements; and
c) a GBP15.0 million revolving facility B, to be made available to fund
the Enlarged Group's working
capital requirements and to finance capital expenditure and potential future
acquisitions.
The New Bank Facilities made available to Breedon will be augmented for the
three business days following Completion, until the proceeds of the Placing are
received by the Company. It is a requirement of the New Facilities Agreement
that the Placing proceeds and existing cash of the Company are used to pay down
the New Bank Facilities (as augmented) by GBP50.0 million within three business
days of Completion. It is expected that after this payment approximately
GBP25.0 million of the revolving facilities A and B will be available to be
drawn.
The BHL Lenders have agreed to extinguish all payment-in-kind interest which has
accrued on the existing facilities (in an amount of approximately GBP11.0
million). The term facility will be increased by GBP5.5 million if the Put and
Call Option is exercised and Breedon becomes obliged to acquire Enneurope.
The Placing
Details of the Placing
Due to the requirements of the Venture Capital Trust ("VCT") Scheme, the Company
will conduct two placings. The VCT Placing Shares will be offered to VCTs
investing funds raised prior to 6 April 2006. The General Placing Shares will be
offered to other investors who will not be seeking relief under the VCT
legislation.
The Placing Shares have been conditionally placed by Cenkos Securities as agent
for the Company with institutional and other investors in accordance with the
terms of the Placing Agreement.
The Placing Shares issued pursuant to the Placing will represent approximately
75.3 per cent. of the Enlarged Share Capital. The Placing Shares will,
following Admission, rank in full for all dividends and pari passu in all other
respects with the Existing Ordinary Shares and will have the right to receive
all dividends and distributions declared, made or paid in respect of the issued
Ordinary Share capital of the Company after Admission. Subject to Admission,
the Company will issue 416,666,667 Placing Shares which will raise GBP50 million
(before expenses). After the expenses of the Placing and Admission, estimated to
be GBP5.75 million (excluding VAT) in total, the Placing is intended to raise
approximately GBP44.25 million.
Further details of the Placing are set out in Part VII (Additional Information)
of the Admission Document.
Use of Placing proceeds
The net proceeds of the Placing will be used to pay down part of the existing
debt of Breedon. Following Completion and payment of the Placing proceeds the
Enlarged Group will have approximately GBP10 million of undrawn revolving credit
facility available to fund the ongoing working capital requirements of the
Enlarged Group and GBP15 million of undrawn revolving credit facility available
to fund the ongoing working capital requirements of the Enlarged Group, to
finance capital expenditure and to finance the implementation of the Company's
acquisitive growth strategy. The Company will also be able to draw on the
increased term facility (if needed) to fund the acquisition of Enneurope under
the Put and Call Option.
The Ordinary Shares have not been, and will not be registered under the US
Securities Act 1933 (as
amended) or with any regulatory authority of any state or other jurisdiction of
the US and may not be offered or sold within the US.
Admission, settlement and dealing arrangements
Application has been made to the London Stock Exchange for the Enlarged Share
Capital to be admitted to trading on AIM, conditional on (amongst other things)
Shareholder approval at the Extraordinary General Meeting. It is expected that
First Admission will become effective and that dealings in the VCT Placing
Shares will commence at 8.00 a.m. on 2 September 2010 and it is expected that
subject to First Admission having occurred, Second Admission will become
effective and that dealings in the General Placing Shares will commence and
dealings in the VCT Placing Shares and Existing Ordinary Shares will recommence
at 8.00 a.m. on 3 September 2010.
Dealings in VCT Placing Shares on the London Stock Exchange before First
Admission will only be settled if First Admission takes place and dealings in
General Placing Shares on the London Stock Exchange before Second Admission will
only be settled if Second Admission takes place. All dealings in Placing Shares
prior to commencement of unconditional dealings will be at the sole risk of the
parties concerned.
Full details of settlement arrangements can be found in the Admission Document.
Notice of Extraordinary General Meeting
An Admission Document is expected to be posted to Shareholders today. The
formal notice convening the Extraordinary General Meeting will be enclosed with
the Admission Document sent to Shareholders.
Recommendation
The Board unanimously recommends that all Shareholders vote in favour of both
Resolutions, as the
Directors intend to do, or procure, in respect of their own beneficial holdings
which comprise a total of 43,850,000 Ordinary Shares, representing approximately
32.2 per cent of the Company's current issued share capital.
Expected Timetable of Principal Events
Publication of the Admission Document
17 August 2010
Latest time and date for receipt of Forms of Proxy
10.00 a.m. on 30 August 2010
Extraordinary General Meeting
10.00 a.m. on 1 September 2010
First Admission becomes effective and dealings commence
in the VCT Placing Shares and Existing Ordinary Shares 8.00
a.m. on 2 September 2010
Delivery into CREST of the VCT Placing Shares to be held in uncertificated form
2 September 2010
Cancellation of dealing facility for the Existing Ordinary Shares
and the VCT Placing Shares
8.00 a.m. on 3 September 2010
Completion of the Acquisition; Second Admission becomes effective and dealings
commence in the General Placing Shares and dealings recommence in the Existing
Ordinary Shares and the VCT Placing Shares
8.00 a.m. on 3 September 2010
Delivery into CREST of the General Placing Shares to be held in uncertificated
3 September 2010
form
Despatch of definitive share certificates (where applicable) in
during the week commencing
respect of the Placing Shares to be held in certificated form
13 September 2010
Each of the dates and times in the above timetable are subject to change at the
absolute discretion of the Company and Cenkos Securities and satisfaction of all
conditions contained in the Acquisition Agreements are assumed.
Placing Statistics
Number of Existing Ordinary Shares
136,000,000
Existing Ordinary Shares as a percentage of the Enlarged Share Capital¹
24.6 per cent.
Placing Price¹
12.0 pence
Number of Placing Shares being issued and allotted pursuant to the Placing¹
416,666,667
Placing Shares as a percentage of the Enlarged Share Capital¹
75.3 per cent.
Number of VCT Placing Shares¹
12,500,000
VCT Placing Shares as a percentage of Enlarged Share Capital¹
2.3 per cent.
Number of General Placing Shares¹
404,166,667
General Placing Shares as a percentage of Enlarged Share Capital¹
73.0 per cent.
Market capitalisation of the Company at the Placing Price on Admission¹
GBP66,440,000
Gross proceeds of the Placing¹
GBP50,000,000
Estimated proceeds of the Placing net of expenses¹
GBP44,250,000
Enlarged Share Capital immediately following Admission²
553,666,667
¹Assuming the Resolutions are passed at the Extraordinary General Meeting and
the Acquisition Agreements and the Placing Agreement become unconditional in all
respects
²Includes 1,000,000 Ordinary Shares to be issued to the Executives pursuant to
the bonus arrangements set out in paragraph 8.1.4 of Part VII (Additional
Information) of the Admission Document
Definitions
The following words and expressions taken from the Admission Document shall have
the following meanings in this Announcement, unless the context otherwise
requires:
+----------------------------+--------------------------------------------+
| "Acquisition" | the proposed acquisition by Marwyn |
| | Materials Investments Limited of the |
| | entire issued share capital of Breedon |
+----------------------------+--------------------------------------------+
| "Acquisition Agreements" | the Main SPA and the Trustee SPA |
+----------------------------+--------------------------------------------+
| "Admission" | means: (i) in relation to the VCT Placing |
| | Shares, First Admission; and (ii) in all |
| | other respects including in relation to |
| | the Acquisition and/or admission of the |
| | General Placing Shares and the |
| | re-admission of the Existing Ordinary |
| | Shares and the VCT Placing Shares, Second |
| | Admission |
+----------------------------+--------------------------------------------+
| "AIM" | AIM, a market operated by the London Stock |
| | Exchange |
+----------------------------+--------------------------------------------+
| "AIM Rules for Companies" | the rules for AIM companies published by |
| | the London Stock Exchange |
+----------------------------+--------------------------------------------+
| "BEAR" | BEAR Scotland Limited (company number |
| | SC206139) |
+----------------------------+--------------------------------------------+
| "BHL Lenders" | Barclays Bank plc, Allied Irish Banks |
| | p.l.c., the Governor and Company of the |
| | Bank of Ireland and KBC Bank NV |
+----------------------------+--------------------------------------------+
| "Board" | the directors of the Company from time to |
| | time, or any duly constituted meeting of |
| | the directors or (where relevant) a |
| | committee thereof) |
+----------------------------+--------------------------------------------+
| "Breedon" | Breedon Holdings Limited (company number |
| | 6773575) |
+----------------------------+--------------------------------------------+
| "Breedon Group" | Breedon and its subsidiary undertakings at |
| | the date of the Admission Document |
+----------------------------+--------------------------------------------+
| "Cenkos Securities" | Cenkos Securities plc (company number |
| | 5210733) |
+----------------------------+--------------------------------------------+
| "Company" or "Marwyn | Marwyn Materials Limited (company number |
| Materials" | 98465) to be renamed Breedon Aggregates |
| | Limited on Completion (subject to the |
| | passing of Resolution 2 at the |
| | Extraordinary General Meeting) |
+----------------------------+--------------------------------------------+
| "Completion" | completion of the Main SPA and the Trustee |
| | SPA |
+----------------------------+--------------------------------------------+
| "CREST" | the relevant system (as defined in the |
| | Uncertificated Securities Regulations 2001 |
| | SI 2001 No. 3755) in respect of which |
| | Euroclear UK & Ireland is the operator (as |
| | defined in the Uncertificated Securities |
| | Regulations 2001 SI 2001 No. 3755) |
+----------------------------+--------------------------------------------+
| "Directors" | the directors of the Company as at the |
| | date of the Admission Document |
+----------------------------+--------------------------------------------+
| "Enneurope" | Enneurope Limited (company number 4254380) |
+----------------------------+--------------------------------------------+
| "Enneurope Holdings" | Enneurope Holdings Limited (company number |
| | 7303053) |
+----------------------------+--------------------------------------------+
| "Ennstone" | Ennstone plc (company number 185664) |
+----------------------------+--------------------------------------------+
| "Enlarged Group" | the combined Marwyn Materials Group and |
| | Breedon Group |
+----------------------------+--------------------------------------------+
| "Enlarged Share Capital" | the enlarged issued share capital of the |
| | Company following Admission |
+----------------------------+--------------------------------------------+
| "Euroclear UK & Ireland" | Euroclear UK & Ireland Limited, the |
| | operator of CREST |
+----------------------------+--------------------------------------------+
| "Executives" | Peter Tom CBE, Simon Vivian and Ian Peters |
+----------------------------+--------------------------------------------+
| "Existing Ordinary Shares" | existing Ordinary Shares in issue at the |
| | date of the Admission Document |
+----------------------------+--------------------------------------------+
| "Extraordinary General | the Extraordinary General Meeting of the |
| Meeting" | Company to be held at 10.00 a.m. on 1 |
| | September 2010, at the offices of Travers |
| | Smith LLP, 10 Snow Hill, London EC1A 2AL, |
| | notice of which is set out at the end of |
| | the Admission Document |
+----------------------------+--------------------------------------------+
| "First Admission" | admission of the VCT Placing Shares to |
| | trading on AIM becoming effective in |
| | accordance with Rule 6 of the AIM Rules |
| | for Companies |
+----------------------------+--------------------------------------------+
| "FSMA" | the Financial Services and Markets Act |
| | 2000 as amended from time to time |
+----------------------------+--------------------------------------------+
| "General Placing" | the proposed conditional placing of the |
| | General Placing Shares with certain |
| | institutional and other investors at the |
| | Placing Price |
+----------------------------+--------------------------------------------+
| "General Placing Shares" | the 404,166,667 new Ordinary Shares to be |
| | allotted and issued by the Company |
| | pursuant to the General Placing |
+----------------------------+--------------------------------------------+
| "HMRC" | Her Majesty's Revenue and Customs |
+----------------------------+--------------------------------------------+
| "ISIN" | International Securities Identification |
| | Number |
+----------------------------+--------------------------------------------+
| "Jersey Companies Law" | Companies (Jersey) Law 1991, as amended |
+----------------------------+--------------------------------------------+
| "Jersey Financial Services | the Jersey Financial Services Commission |
| Commission" | |
+----------------------------+--------------------------------------------+
| "Johnston" | Ennstone Johnston Limited (company number |
| | 156531), a wholly owned subsidiary of |
| | Breedon |
+----------------------------+--------------------------------------------+
| "London Stock Exchange" | London Stock Exchange plc |
+----------------------------+--------------------------------------------+
| "Main SPA" | the conditional agreement, dated 16 August |
| | 2010, between Marwyn Materials Investments |
| | and the Vendors, relating to the sale and |
| | purchase of the Sale Shares |
+----------------------------+--------------------------------------------+
| "Management Warranty Deed" | the management warranty deed dated 16 |
| | August 2010 entered into between the |
| | Managers, Marwyn Materials Investments and |
| | Marwyn Materials |
+----------------------------+--------------------------------------------+
| "Managers" | Alan Mackenzie, Ciaran Kennedy, Tony |
| | Large, Ross McDonald and John Foldes, the |
| | managers of Breedon |
+----------------------------+--------------------------------------------+
| "Marwyn" | Means Marwyn Investments Group Limited and |
| | its subsidiaries and associated companies |
+----------------------------+--------------------------------------------+
| "Marwyn Materials Group" | the Company and its subsidiary |
| | undertakings at the date of the Admission |
| | Document |
+----------------------------+--------------------------------------------+
| "Marwyn Materials | Marwyn Materials Investments Limited |
| Investments" | (company number 160816) |
+----------------------------+--------------------------------------------+
| "New Bank Facilities" or | the facilities made available pursuant to |
| "New Facilities Agreement" | the facilities agreement originally dated |
| | 9 March 2009 and made between Breedon and |
| | the BHL Lenders, as amended on 30 April |
| | 2010 and further amended and restated |
| | pursuant to an amendment and restatement |
| | agreement dated 16 August 2010 |
+----------------------------+--------------------------------------------+
| "Official List" | the Official List of the UK Listing |
| | Authority |
+----------------------------+--------------------------------------------+
| "Ordinary Shares" | ordinary shares of no par value in the |
| | share capital of the Company |
+----------------------------+--------------------------------------------+
| "Placing" | the conditional placing of the Placing |
| | Shares by Cenkos Securities, at the |
| | Placing Price pursuant to the Placing |
| | Agreement |
+----------------------------+--------------------------------------------+
| "Placing Agreement" | the conditional agreement dated 16 August |
| | 2010 between the Company, the Directors |
| | and Cenkos Securities relating to the |
| | Placing, summary details of which are set |
| | out in paragraph 2 of Part 5 of the |
| | Admission Document |
+----------------------------+--------------------------------------------+
| "Placing Price" | 12.0 pence per Placing Share |
+----------------------------+--------------------------------------------+
| "Placing Shares" | the VCT Placing Shares and the General |
| | Placing Shares |
+----------------------------+--------------------------------------------+
| "Put and Call Option" | the put and call option agreement dated 16 |
| | August 2010 between Breedon, Enneurope |
| | Holdings and the Vendors, summary details |
| | of which are set out in paragraph 15.2.6. |
| | of Part VII (Additional Information) of |
| | the Admission Document |
+----------------------------+--------------------------------------------+
| "Resolutions" | the resolutions set out in the notice of |
| | Extraordinary General Meeting set out at |
| | the end of the Admission Document |
+----------------------------+--------------------------------------------+
| "Sale Shares" | the one A ordinary share, 36,526 B |
| | ordinary shares, 6,064 C1 ordinary shares, |
| | 7,205 C2 ordinary shares and 7,205 C3 |
| | ordinary shares in the capital of Breedon |
+----------------------------+--------------------------------------------+
| "Second Admission" | Admission the General Placing Shares and |
| | readmission of the VCT Placing Shares and |
| | Existing Ordinary Shares to trading on |
| | AIM, becoming effective in accordance with |
| | Rule 6 of the AIM Rules for Companies |
+----------------------------+--------------------------------------------+
| "Shareholder" | a holder of Ordinary Shares |
+----------------------------+--------------------------------------------+
| "subsidiary undertaking" | as defined in section 1162 of the |
| | Companies Act 2006 |
+----------------------------+--------------------------------------------+
| "Thistle" | Ennstone Thistle Limited (company number |
| | SC144788), a wholly owned subsidiary of |
| | Breedon |
+----------------------------+--------------------------------------------+
| "Trustees" | the trustees of the Johnston Management |
| | Holdings Limited Pension and Life |
| | Assurance Scheme, being HR Trustees |
| | Limited, Brian Watkins and John Campbell |
+----------------------------+--------------------------------------------+
| "Trustee Shares" | the 28,070 D ordinary shares in the |
| | capital of Breedon |
+----------------------------+--------------------------------------------+
| "Trustee SPA" | the conditional agreement, dated 16 August |
| | 2010, between Marwyn Materials, Marwyn |
| | Materials Investments and the Trustees, |
| | relating to the sale and purchase of the |
| | Trustee Shares |
+----------------------------+--------------------------------------------+
| "UK" or "United Kingdom" | the United Kingdom of Great Britain and |
| | Northern Ireland |
+----------------------------+--------------------------------------------+
| "UK Listing Authority" | the Financial Services Authority acting in |
| | its capacity as the competent authority |
| | for the purposes of Part VI of the FSMA |
| | and in the exercise of its functions in |
| | respect of admission to the Official List |
+----------------------------+--------------------------------------------+
| "VCT" | a venture capital trust for the purposes |
| | of Part 6, Chapters 1 to 6 of the UK |
| | Income Tax Act 2007 and a company, broadly |
| | similar to an investment trust, which has |
| | been approved by HMRC and which subscribes |
| | for shares in, or lends money to, unquoted |
| | (including AIM listed) companies |
+----------------------------+--------------------------------------------+
| "VCT Placing" | the proposed conditional placing of the |
| | VCT Placing Shares with certain |
| | institutional investors at the Placing |
| | Price |
+----------------------------+--------------------------------------------+
| "VCT Placing Shares" | the 12,500,000 new Ordinary Shares to be |
| | issued and allotted by the Company |
| | pursuant to the VCT Placing |
+----------------------------+--------------------------------------------+
| "VCT Scheme" | a scheme under which VCTs and their |
| | investors enjoy certain tax reliefs |
+----------------------------+--------------------------------------------+
| "Vendors" | Stephen Rushworth Smith, Barclays |
| | Converted Investments (No. 2) Limited, |
| | Globe Nominees Limited, KBC Bank NV, |
| | Allied Irish Banks plc and the Governor |
| | and Company of the Bank of Ireland |
+----------------------------+--------------------------------------------+
| "Warrant Holder" | a holder of Warrants |
+----------------------------+--------------------------------------------+
| "Warrant Instrument" | the warrant instrument to be executed by |
| | the Company constituting the Warrants |
+----------------------------+--------------------------------------------+
| "Warrants" | the warrants to subscribe for 55,266,667 |
| | Ordinary Shares pursuant to the terms of |
| | the Warrant Instrument to be issued in |
| | connection with the Acquisition |
+----------------------------+--------------------------------------------+
Notices
This announcement does not constitute an offer or invitation to purchase or
subscribe or a solicitation of an offer to buy any securities pursuant to this
announcement or otherwise in any jurisdiction and investors should not subscribe
for any shares referred to herein except on the basis of the Admission Document,
produced by the Company, drawn up in accordance with the AIM Rules for
Companies. The Admission Document is available at www.marwynmaterials.com
The release, publication or distribution of this announcement in jurisdictions
other than the UK may be restricted by the laws of those jurisdictions and
therefore persons should inform themselves about and observe such restrictions.
Any failure to comply with any such restrictions may constitute a violation of
the securities laws of any such jurisdictions.
This communication does not constitute an offer of securities to the public in
the United Kingdom. No prospectus has been or will be registered in the United
Kingdom in respect of the securities referred to in this communication. This
document is exempt from the general restriction on the communication of
invitations or inducements to enter into investment activity (within the meaning
of section 21 of FSMA) and has therefore not been approved by an authorised
person within the meaning of FSMA. This communication is being distributed only
to and directed only at (i) persons falling within Article 19(5) ("investment
professionals") of The Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (the "Order") who have professional experience in matters
relating to investments, (ii) persons falling within Article 49 ("high net worth
companies etc") and/or (iii) other persons to whom it may otherwise lawfully be
communicated (all such persons together being referred to as "relevant
persons"). This communication must not be acted on or relied on by any person
who is not a relevant person. Any investment or investment activity to which
this communication relates is available only to relevant persons and will be
engaged in only with relevant persons.
Information for United States and other overseas shareholders
This announcement is not for release in the United States, South Africa,
Australia, Canada or Japan or in any other country outside the United Kingdom
where such distribution may lead to a breach of law or regulatory requirements.
This information is not for publication or distribution to persons in the United
States. The distribution of this announcement in whole or part may, in certain
jurisdictions, be restricted by law and therefore persons into whose possession
this document comes should inform themselves about and observe any restrictions.
Any failure to comply with these restrictions may constitute a violation of the
securities laws of any such jurisdiction.
The information herein is not an offer of securities for sale in the United
States. The Ordinary Shares have not been and nor will be, registered or
qualified for sale under the US Securities Act of 1933, as amended (the
"Securities Act") and, unless the Ordinary Shares are registered under the
Securities Act or an exemption from the requirements of the Securities Act is
available, the Ordinary Shares may not be offered or sold directly or indirectly
within the United States or to, or for the account or benefit of, any US persons
or any national, citizen or resident of the United States.
Cautionary note regarding forward-looking statements
This announcement contains forward-looking statements. Such statements are
subject to certain risks and uncertainties, in particular statements regarding
plans, goals, prospects, developments and strategies for the Enlarged Group's
future. The Enlarged Group's actual results and operations could differ
fundamentally from those anticipated in such forward looking statements as a
result of many factors including the risks faced by the Enlarged Group which are
described in Part III and elsewhere in the Admission Document. These statements
and assumptions that underlie them are based on the current expectations of the
Directors and are subject to a number of factors, many of which are beyond their
control. As a result, there can be no assurance that actual results will not
differ materially from those described in this announcement. Forward-looking
statements are identified by their use of terms and phrases such as "believe",
"could", "envisage", "estimate", "intend", "may", "plan", "will" or the negative
of those, variations or comparable expressions, including reference to
assumptions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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